Angst in the Aisles

ARTICLE

Date April 2016

Featured in Shopping Centers Today

Q. How is the way consumers shop changing the supermarket industry?
A. The grocery sector is bifurcating into two segments: Very large stores with regional draws, where customers can get unique products and get exactly what they want in one shopping trip; and the smaller stores that often serve as fill-in or specialty trips, but often are not the consumer’s regular grocery store.

Q. What advantages do the large-format stores have?
A. These very large stores are often locating at new sites on the perimeter of the population base – but with regional highway access – that were previously not retail destinations. The spending per cart is high at these types of stores, usually more than $150, and often approaching $300 and above when you throw in sushi and things like that.

Q. How do the smaller supermarket players stay competitive?
A. The smaller stores are usually quick trips, with a spend of often less than $100 per trip – although the value can be very high even with one shopping bag, because of the high margins, and higher prices for many of the specialty products.

Q. Are traditional supermarket players still opening new stores?
A. When you look at the traditional grocer boxes in terms of organic growth, Publix is growing, and HEB is growing some. But other than that, the only other growth by traditional grocers is mostly via acquisition as they merge or gobble up some smaller players.